WASHINGTON - Is the nation's financial system safe during disasters? The House Financial Services Subcommittee on Oversight and Investigations held a hearing last week entitled Government and Industry Efforts to Protect Our Money During Blackouts, Hurricanes, and Other Disasters, to find out. The hearing looked into security and disaster preparedness in disaster situations, such as hurricanes, blackouts or terrorist attacks. The government ant private sector have partnered since the 9/11 terrorist attacks to ensure the stability of the financial industry and infrastructure. Bank of America Corporate Information Security Senior Vice President Rhonda MacLean, private sector coordinator for the Financial Services Sector Coordinating Council (FSSCC) for Critical Infrastructure Protection and Homeland Security, provided testimony at the hearing. CUNA and NAFCU are both members of the organization, which held a meeting on the same subject just the week before. FSSCC meetings are coming up in Waltham, Mass. Nov. 7 and Cleveland, Ohio Nov. 20. The council has made plans for about 25 meetings across the nation through the end of 2005. The FSSCC coordinates with its public sector equivalent, the Financial and Banking Information Infrastructure Committee (FBIIC), chaired by the Treasury Department. "The result is an emerging agreement on strategic initiatives we believe will improve infrastructure protection and homeland security," MacLean said. Currently, the FSSCC is focusing on five primary areas, one of which is information dissemination and sharing. Over the last six months, the council has gone from distributing urgent alert and warning data to about 70 financial institutions to 8,000 today. The council is working on better crisis and response management among its members and the government. The FSSCC is also concentrating on sector and cross sector outreach, as well as best practices sharing and national strategy and programming to advance sector-side critical infrastructure and homeland security efforts. MacLean noted in her testimony that the financial services sector has had a couple of real life opportunities to test its emergency management procedures, including the August Blackout and Hurricane Isabel. "Most data centers switched over to emergency power, resulting in no disruption to clearing and settlement system activities," she said. "Some fuel deliveries occurred during the night to ensure adequate long-term emergency power in the event of a prolonged outage. With power restored to critical locations before start of business the next day, critical market and clearing and settlement processing occurred without major disruption. Some voice communications were affected, and those issues are being reviewed." Last week, FBIIC issued a positive analysis of the impact of the two events on the financial services sector. "As a result of vigilance and careful contingency preparation by the financial services sector, and perhaps most importantly, by a reliance upon people who know their job best to do their job, we are pleased to report that these recent events caused minimal disruption to financial services, demonstrating once again the resilience of the U.S. financial system," Treasury Assistant Secretary for Financial Institutions Wayne A. Abernathy concluded in a statement. Abernathy also testified at the congressional oversight hearing. He explained that FBIIC operated by four guiding principles: protect our financial infrastructure, promote confidence, ensure open markets, and encourage decentralized decision-making and problem solving. He noted the efforts of the financial services sector to obtain back-up power and work through difficulties for consumers. When the power went out just after 4:00 pm on Thursday, Aug. 14, Abernathy said, by 6:00 pm, the financial markets had announced that they would be open for trading during their normal hours on Friday. "This commitment to serve customers even in times of adversity is important," he said. "It gives customers confidence in using the U.S. financial system and, in turn, helps promote rational financial decisions by institutions and their customers." He applauded financial institutions for asking themselves how they could best serve their customers, rather than whether or not they would open the next day. Abernathy added that the financial institutions were well-equipped and communicated well with each other and their regulators, as did the regulatory agencies. Though the financial services sector survived these emergencies relatively unscathed, valuable lessons were learned, including working out interdependencies in areas like energy, telecommunications, and information technology. -firstname.lastname@example.org
Security of Financial Infrastructure Top Priority In Disasters; Industry Preparedness Scored Well
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